E-government projects over by £18bn

Monday, February 02, 2009

An investigation has revealed that the biggest e-government projects have cost overruns reaching £18bn.

According to The Times, large e-government projects are running late most of the time and are billions of pounds over budget, creating billions of revenue for IT suppliers. Forecasts from the investigation said private sector companies can expect to receive £102.3bn in revenues, potentially providing hundreds of millions of pounds of profit.

The biggest cost overrun has come from the NHS's National Programme for IT (NPfIT) – a programme to overhaul NHS IT systems. Its original cost was estimated at £2.3bn, but is now standing at £12.7bn.

An IT contract for the tax credit system was originally set by HM Revenue and Customs (HMRC) at £2.9bn but will now cost £8.5bn. Another to link Ministry of Defence databases was supposed to cost £5.8bn; the latest bill is for £7.1bn.

The National Audit Office is expected to criticise severely the Ministry of Justice, whose prison project is overrunning by £456m even though its scope was scaled back. The system that aims to link records for each offender will only be installed in prisons and not shared with the Probation Service, as originally planned.